IBM Hikes Maintenance Fees on Power-Based Gear

March 21, 2011
Timothy Prickett Morgan

Well, you could probably see this one coming from about a zillion light years away. Last week, IBM warned customers that it was going to raise monthly and annual maintenance fees on a slew of hardware, including a raft of vintage AS/400 and RS/600 machines as well as more recent iSeries and pSeries gear, System i and System p iron, and even some earlier generations of the Power Systems lineup.

Basically, the message is exactly what you would expect it to be: move up to Power7-based machines and save a bunch of money on hardware maintenance fees.

In announcement letter 311-031, IBM said that it was raising annual and monthly minimum maintenance charges (MMCs) for thousands of pieces of hardware. On the OS/400 and i platforms affected by the price hike, as best as I can figure, the increase in maintenance ranges from 3 to 5.4 percent, with the average around 3.4 percent. These price changes will kick in on July 1 of this year, so IBM is giving more than three months’ notice on maintenance price changes. This has been IBM’s practice for the more than two decades that I have been paying attention to Big Blue.

Announcement letter 311-033 details how IBM is boosting prices on ServiceElect, ServiceSuite, and ServiceElite maintenance charges. These are special service packages that IBM wrapped up, primarily for its large enterprise customers, back in the late 1990s. These charges are different from the annual or monthly MMC fees that the typical midrange shop is used to paying for. But don’t get the wrong idea. There is plenty of OS/400 and i gear that has been affected by this other price change. Some of the prices changed as much as 20 percent–and on recent Power Systems 8203 and 8204 systems–but the dollar amounts for these monthly fees are still pretty small. (We’re talking an extra four bucks a month.) As was the case in the MMC price change, these elite service packages seem to be averaging about a 3 to 4 percent price hike.

As is usually the case, the documents explaining the price changes on maintenance are absolutely immense (by text document standards). And a lot of it has nothing to do with your OS/400 and i systems. I extracted as much of the relevant machinery from the two announcement letters and organized it into an Excel spreadsheet to help you see what IBM did better. You can download that sheet, which I compressed into a ZIP format, here. I don’t claim that I caught every OS/400 and i product, so don’t get picky on me. If you have an IBM machine of any kind and you have it on maintenance, you should open up the IBM announcement letters and do a search for your machine model numbers. Tape drive and libraries and other common hardware in midrange data centers with the IBM label on them have been hit by the price hike.

IBM last raised maintenance on a slew of AS/400, iSeries, and System i machinery back in March 2008, just as the recession was getting a good head of steam. (Or the economy was starting to lose a head of steam, depending on how you want to look at it.) That maintenance price increase was around 5 percent for systems and between 5 and 9.5 percent on features within the system that carry their own charges separate from the base machine. IBM raised maintenance on selected iSeries machines by 17 to 19 percent in February 2006, when Global Services was getting hammered, and in April 2006, vintage AS/400 boxes had a 9 percent or so maintenance hike. A 3 to 4 percent increase doesn’t seem so bad this time around.